Consumer Preferences Before and After a Food Safety Scare: An Experimental Analysis of the 2010 Egg Recall

In August 2010, more than half a billion eggs were recalled in the U.S. because of a Salmonella outbreak. This study examines the effect of the recall with a unique pair of auction experiments investigating willingness to pay (WTP) for conventional and organic eggs, one conducted shortly before and one right after the recall with the same participants. In addition to the before and after bids, participants bid again after a negative information or balanced information treatment about the event. Accompanying surveys showed consumers had a high level of awareness of the recall but less knowledge of specific details, and viewed information on egg farm conditions as very important in their WTP. While there were no significant before and after differences, WTP for organic eggs significantly increased in the negative information treatment, and balanced information had a positive effect on consumer WTP for conventional eggs.

[1]  L. Zepeda,et al.  A Model of Consumers' Risk Perceptions Toward Recombinant Bovine Growth Hormone (rbGH): The Impact of Risk Characteristics , 1999, Risk analysis : an official publication of the Society for Risk Analysis.

[2]  G. Hastings,et al.  Fear appeals in social marketing: Strategic and ethical reasons for concern , 2004 .

[3]  James Kliebenstein,et al.  Valuing Food Safety in Experimental Auction Markets , 1995 .

[4]  Sandra J. Hamm,et al.  Sales Responses to Recalls for Listeria monocytogenes: Evidence from Branded Ready-to-Eat Meats , 2006 .

[5]  Matthew C. Rousu,et al.  Who Do Consumers Trust for Information: The Case of Genetically Modified Foods? , 2004 .

[6]  T. Roberts.  WTP Estimates of the Societal Costs of U.S. Food-Borne Illness , 2007 .

[7]  William Vickrey,et al.  Counterspeculation, Auctions, And Competitive Sealed Tenders , 1961 .

[8]  J. Lusk,et al.  A Meta-Analysis of Genetically Modified Food Valuation Studies , 2005 .

[9]  Joshua D. Detre,et al.  One bad apple spoils the bunch? An exploration of broad consumption changes in response to food recalls , 2014 .

[10]  M. Kikuchi,et al.  Risk-learning process in forming willingness-to-pay for egg safety , 2004 .

[11]  T. Schroeder,et al.  Evaluating the costs of meat and poultry recalls to food firms using stock returns , 2016 .

[12]  John C. Bernard,et al.  What is it About Organic Milk? An Experimental Analysis , 2009 .

[13]  Steven S. Vickner,et al.  Media Coverage of Biotech Foods and Influence on Consumer Choice , 2004 .

[14]  D. Dickinson,et al.  Meat Traceability: Are U.S. Consumers Willing to Pay for It? , 2002 .

[15]  DeeVon Bailey,et al.  Traceability in the Canadian Red Meat Sector: Do Consumers Care? , 2005 .

[16]  T. Marsh,et al.  Does Food Safety Information Impact U.S. Meat Demand , 2004 .

[17]  F. Kuchler,et al.  Changes in U.S. consumer response to food safety recalls in the shadow of a BSE scare , 2016 .

[18]  B. Wansink,et al.  Can generic advertising alleviate consumer concerns over food scares? , 2011 .

[19]  Jason F. Shogren,et al.  Consumer Preferences for Food Irradiation: How Favorable and Unfavorable Descriptions Affect Preferences for Irradiated Pork in Experimental Auctions , 2002 .

[20]  F. Kuchler,et al.  Consumer Response to a Food Safety Shock: The 2006 Food-Borne Illness Outbreak of E. coli O157: H7 Linked to Spinach , 2009 .

[21]  J. Shogren,et al.  Consumer acceptability of milk from cows treated with bovine somatotropin. , 1994, Journal of dairy science.

[22]  S. Pouliot.  Consumer confidence in Food Safety and the 2010 egg recall , 2012 .

[23]  R. Neff,et al.  Print news coverage of the 2010 Iowa egg recall: Addressing bad eggs and poor oversight , 2012 .

[24]  Kristine M. Grimsrud,et al.  Bovine Spongiform Encephalopathy in Japan: Consumers' Food Safety Perceptions and Willingness to Pay for Tested Beef , 2005 .

[25]  J. Hair.  Multivariate data analysis , 1972 .

[26]  Wim Verbeke,et al.  A fresh meat almost ideal demand system incorporating negative TV press and advertising impact , 2001 .

[27]  J. G. Adair,et al.  The Hawthorne effect: A reconsideration of the methodological artifact. , 1984 .

[28]  D. Barbano,et al.  CONSUMER PERCEPTIONS AND ATTITUDES TOWARDS BOVINE SOMATOTROPIN , 1992 .

[29]  Roger A. Dahlgran,et al.  The demand impacts of chicken contamination publicity-a case study , 2002 .